Creating the metaverse from the inside out

When observing the hype surrounding the metaverse, you tend to see young tech founders presenting a future where you can experience life as your favourite Star Wars character. It is a world of fantasy, gaming and entirely virtual. 

One of DBS’s most ardent evangelists for the promise of the metaverse is a lawyer, albeit a lawyer who currently spends his free time playing online action role-playing game Genshin Impact from miHoYo and sees the metaverse as entirely human. 

Lam Chee Kin, legal and compliance head at DBS, does think the idea of Disney creating a metaverse game that lets people embody a character from a galaxy far, far, away would be something “the entire Star Wars fanbase would absolutely love”. However, he fears that talk about ‘the metaverse’ often focuses only on certain parts, much like the parable of the blind men failing to point out the elephant in the room because they only have touched its ear, tusk or tail. 

Augmented reality and gaming figure highly in discussions about the future of the metaverse. However, according to Mr Lam, the metaverse speaks to something fundamental in human psychology. 

“The metaverse will be humanity living, playing and working in a digital reality, with that digital reality still interacting with the physical reality,” he says. “It’s a different way to experience life, a different way to experience play, a different way to experience work.”

Three areas of focus

DBS has identified three broad areas to watch with metaverse technology, says Mr Lam. These are immersion technology, which is a replication of a full-spectrum human sensory experience; delivery technology to offer that experience in accessible way; and digital asset technology, the ability to freely own and transfer digital assets within a metaverse and across metaverses, upheld by the prevailing legal systems of the physical world. 

This September, DBS announced a partnership with The Sandbox, an Asian-based decentralised gaming virtual world, to create DBS BetterWorld, an interactive metaverse experience that aims to show the bank’s commitment to sustainability. Mr Lam says the partnership with The Sandbox is what the bank calls an ‘outside in’ business model, which is essentially replicating banking experiences, customer engagement and branding with metaverse functionality.

However, the bank is more interested in what Mr Lam calls the ‘inside out’ business model, which is enabling and embedding value-added financial services into the metaverse, including facilitating exchange between digital and non-digital financial assets and flows.

“It’s reasonably foreseeable that in the future, you will have all these companies that will have metaverses of their own,” he says. “Some of them will be walled garden metaverses; some of them will be open ecosystem metaverses.”

The financial services industry has an opportunity to focus outwards regarding its financial services capability, especially around digital assets, potentially even lending on the security of digital assets, says Mr Lam. 

“For example, facilitating financial flows between metaverse one and metaverse two – these are the kinds of things that actually financial services is quite good at doing because we flip the underlying trade hedging risk management capabilities,” he says. “It isn’t too much of a stretch for financial services to look outwards and look to partner with these metaverses.”

The limits of technology

Mr Lam highlights Disney CEO Bob Chapek describing the metaverse as allowing a connection between physical and digital worlds and offering next-generation storytelling. Storytelling evolved from an oral tradition, moving on to cave paintings, the written word, the printing press and then onto motion pictures and the internet which “globalised the stories of societies”. The metaverse is the “logical extension” of storytelling evolution, Mr Lam adds. 

This connection is important because “a lot of innovation can be confused with technology”, he says. 

“Technology for technology’s sake is never the right thing to do,” he adds. “I’m taking a human-centric view on this. I’m looking at our customers, how people will want to be engaged, what they like, what they don’t like, what are the risks and challenges.”

Mr Lam says these experiments with metaverse technology are part of a larger trend of banks re-examining their role in society and overall purpose. 

“We need to go back to our roots in banking,” he says. “We contribute by intermediating financial flows, and we contribute by adding a multiplier effect from the fractional reserve system. I think going back to those roots, going back to why we help more and more people intermediate financial flows, that’s financial inclusion. How do we contribute to economies by using the multiplier effect? With the fractional reserve system? How do we contribute to society and sustainability? That’s the stuff that gets me super, super excited.”